Eco-Solution:
CITIC Envirotech Ltd.

Operates a portfolio of wastewater treatment plants that use advanced membrane bio-reactor technology.

Treated approximately 450 million cubic meters of wastewater in 2015.

Challenge

While China sustains nearly 20 percent of the global population, the country only contains about 7 percent of the world’s freshwater.i Additionally, a significant portion of China's limited freshwater is not available for consumption due to pollution, primarily from manufacturing. Nearly two-thirds of groundwater and one-third of surface water are considered unfit for human consumption by the Chinese Ministry of Environmental Protection.ii While China has undertaken various policy measures to improve the availability of clean water for the country, the private sector has the opportunity to also address the issue of water pollution through innovative technological and service solutions.

CITIC Envirotech Limited (CEL), a leading water treatment and recycling solution provider in China, provides an array of solutions to this environmental and societal need. CEL provides engineering, procurement, and construction services to municipal and industrial wastewater treatment projects. It operates a portfolio of wastewater treatment plants across the country and also manufactures and supplies polyvindylidence fluoride hollow fiber membrane and membrane products. CEL provides efficient, effective wastewater treatment, a vital component of modern, well-designed cities.

Response

A core technological capability — the membrane bio-reactor (MBR) — enables CEL to meet China’s recent stricter water quality regulations and avoid associated non-compliance penalties. This technology combines membrane separation with biological wastewater treatment, which, in turn, reduces water use. This process increases the water quality output, lessens the waste produced, and uses less land than the conventional approach. Although initial facility costs are higher than conventional methods, the MBR technology requires only 20 to 50 percent of the land area of traditional plants, which offsets the higher initial costs. Furthermore, the MBR technology is more resilient to shock loading, a sudden increase in contaminant concentration during a wastewater treatment process. Most notably, according to CEL’s analysis, the water output of its treatment centers is of high quality and virtually free of bacteria, microbes, and other suspended solids, as compared to the low quality output of conventional methods.

Resultsiii

Through its engineering, procurement, and construction services, CEL has built more than 100 MBR plants, including the largest wastewater treatment plant with membrane technology in China, and has built one of the largest underground municipal wastewater treatment plants in the world. CEL has grown since it began operations in 2003 and, as of the end of 2015, now owns more than 40 plants with design capacity of more than 3 million cubic meters of water per day. In 2015, approximately 450 million cubic meters of wastewater were treated by plants managed by CEL. CEL actively seeks to improve the quality of water discharged from its treatment plants and also focuses on reducing energy consumption, waste generation, and chemical use.

Looking Forward

CEL continues to combat water pollution in China, which is caused primarily by the discharge of poorly treated water, through the acquisition of plants or winning additional mandates. Although its focus will remain on the industrial wastewater treatment plants, CEL is also seeking opportunities in the drinking water segment. CEL will continue to provide solutions through its technological expertise, best market practices, and growing reach throughout China.

CEL is committed to enhancing water quality and proper sanitation through its large wastewater treatment plants as well as through projects in rural communities. In April 2014, the company partnered with Lien AID, an international nonprofit organization committed to clean water and sanitation access for Asia’s rural poor. CEL is working with Lien AID to empower rural communities to be water self-sustainable.

CEL began participating in KKR's green program in 2015 and is communicating results for the second time. For more information on CEL’s efforts, visit its website.

iii Self-reported portfolio company data is not calculated, reviewed or independently verified by KKR or KKR Capstone. For more information regarding the results methodology for companies evaluating their own data, please see the methodology section. There is no guarantee that any GSP-related avoided costs or added efficiencies will positively impact the portfolio company’s valuation or performance.

Unless otherwise noted, portfolio company data represents 2015 results, published in August 2016. These case studies may contain forward looking statements including descriptions of planned projects and projected results and savings. These statements are subject to the risk that the projects will not develop as planned or at all or that projected results and savings are not realized.